Hillary Clinton heads to Israel today after meeting in Cairo with Field Marshal Hussein Tantawi, head of the Egyptian military council, where she pressed the military to work with newly elected Muslim Brotherhood President Mohamed Morsi to transition to full civilian rule.

And President Obama continued his attacks yesterday on Mitt Romney`s record of outsourcing while at Bain Capital. We`ll have Ed Conard, a partner at Bain until 2007, later on today to sort out Romney`s record there.

But, first, my story of the week: the Voting Rights Act and how it may determine the outcome of this year`s presidential race.

In closing arguments this Friday, attorneys for the state of Texas argued the state should be released once and for all from the Justice Department supervision of its voting process which is currently authorized by the Voting Rights Act of 1965. The case is widely expected end wind up before the Supreme Court where it won`t be surprising if we find the five Republican appointees declaring the Voting Rights Act as no longer justified, and is gutted, or entirely null.

The portion of the act at issue covers nine states and counties and townships and seven others largely in the South that have a history of erecting barriers to black people exercising their right to vote. In year`s past, this took a variety of forums, grandfather tests that stopped newly formed slaves from voting since their grandfathers weren`t in the rolls, literacy tests selectively administered and devilishly difficult, or simple poll taxes that forced people to pay to vote f they could afford it.

After one of the most powerful and courageous social movements in history, one which shook the lives of at least 40 people, according to the Southern Poverty Law Center, LBG signed the Voting Rights Act in 1975 ending these practices.

(BEGIN VIDEO CLIP)

LYNDON B. JOHNSON, FORMER U.S. PRESIDENT: Wherever by clear and objective standards, states and counties are using regulations or laws or tests to deny the right to vote, then they will be struck down. If it is clear that state officials still intend to discriminate, then federal examiners will be sent in to register all eligible voters. When the prospect of discrimination is gone, the examiners will be immediately withdrawn. And under this act, if any county anywhere in this nation does not want federal intervention, it need only open its polling places to all of it people.

(END VIDEO CLIP)

HAYES: It wasn`t until the passage of the Voting Rights Act and many amendments to it over the years that black people in the South and some places outside the South could actually exercise their right to be full participating citizens in American democracy.

Texas would now like to get rid of that rule so it can impose a voter ID requirement and more broadly do whatever it damn well pleases as far as restrictions on voting are concerned.

It just so happens that while Texas is pursuing an end to the right of tyranny that is the Voting Rights Act, states around the nation under Republican control have been waging an unparalleled assault on access to the voting for the poor and marginal. In Pennsylvania, new voter ID law, recent study found that 750,000 people or one-tenth of the total electorate don`t have IDs that will enable them to vote in November.

Alabama now requires voters to provide documentary proof of citizenship, which 7 percent of Alabama voters were former voters do not have.

Brennan Center for Justice estimates the total number of voters nationwide imperiled by laws that have been adopted or that will go into effect is more than 5 million. Remember, the margin of victory the last time a president was up for re-election was just over 3 million votes. When defending these laws, Republicans will cite the odd anecdote of voter impersonation or voter fraud, but any and all serious inquiries into the topic find the problem is statistically nonexistent.

Even U.S. attorneys handpicked by the Bush administration and pushed to prosecute voter fraud were unable to find much of anything.

(BEGIN VIDEO CLIP)

DAVID IGLESIAS, FORMER U.S. ATTORNEY: We took over 100 complaints and we set up a hotline. I mean, I believe there to be prosecutable cases but I was going to make up evidence. And at the end of two years, I couldn`t find one case I could prosecute.

(END VIDEO CLIP)

HAYES: U.S. attorneys who balked at wasting resources chasing down non-existent villains found themselves condemned by local Republican bigwigs and ultimately fired by the White House. That was the core of the U.S. attorney scandal.

No amount of vigor could change the fact that voter fraud or/and impersonation is exceedingly rare, almost not existent. In fact, this handy graphic created by the Democratic Party shows UFO sightings are far more common than actual instances of voter fraud.

Because the effects of restrictions on, say, voter registration drives and requirements to show ID falls so disproportionately on poor people and people of color, it`s not unreasonable to see these efforts pushed almost exclusively by white Republicans loaded racial subtext. That`s what Attorney General Eric Holder was referring to this Tuesday when he pushed back on Texas proposed voting regulations.

(BEGIN VIDEO CLIP)

ERIC HOLDER, ATTORNEY GENERAL: Under the proposed law, concealed handgun licenses would be acceptable forms of photo ID, but student IDs would not. Many of those without IDs would have to travel great distances to get them. And some would struggle to pay for the documents they might need to obtain them. We call those poll taxes.

(END VIDEO CLIP)

HAYES: To conservatives, there is no greater a front than to alleged racism. The reactions to Holder`s comments were offended and histrionic. How could he compare the practices of the racist old South with a common sense, race neutral desire to simply ensure clean elections?

But it`s worth remembering what the original poll tax was like. Sure, we now understand it as a tool of white supremacy ands oppression, but the point of the poll tax or the literacy tests, was that those who pushed them could claim they had nothing to do with race. On their face, they weren`t discriminatory. Shouldn`t people be able to read if they`re going to vote? Isn`t that common sense?

Of course, they were designed and implemented to create disproportionate racial effects. But the genius in many ways of Voting Rights Act is that intent doesn`t matter, effects do. Lawyers for the Department of Justice simply consider t the effects of new proposals and redistricting, not the intent. No one has to do any mind reading.

We can leave aside the question of what Rick Perry feels his heart of hearts about people of color. Back in the old days of Jim Crow, it was of course mostly white racist Democratic politicians who oversaw the system of mass disenfranchisements.

And there were more than a few white Republicans who boldly championed civil rights, among them this man, Republican Governor George Romney of Michigan who march with the NAACP in 1963 and walked out of the 1964 Republican convention in protest of Barry Goldwater`s opposition of the Civil Rights Act.

Those days are long gone. LBJ`s embrace of the Civil Rights Act followed by the Republican Southern strategy has led to our current situation in which Republicans essentially don`t have African-Americans in their coalition but they do have most of the white races, which means that black voters are understandably skeptical of what Republican politicians like George Romney`s son, are selling.

Mitt Romney mentioned not a peep about voter restrictions during a speech to the NAACP this week, though Joe Biden, who addressed this group a day later, most surely did.

The awkward truth is that when a party gets essentially zero support from a sub demographic of people, it is strategically sensible, though morally bankrupt, to attempt to reduce their participation in voting -- which means it`s entirely possible that Romney`s fellow Republicans want to make it harder for poor people of color to vote simply because they`re likely to vote for Democrats rather than because they aren`t white.

But as the Voting Rights Act widely says, the intent doesn`t matter, it`s the effect. And either way it`s wrong.

I want to talk with our panel about the modern GOP race and Romney`s NAACP speech after this.

(COMMERCIAL BREAK)

HAYES: All right. Good morning. We`re talking about the Voting Rights Act and the challenge to it by Texas, Mitt Romney`s speech at NAACP and the politics of race and voting in this election.

And joining me today, we have Dedrick Muhammad, the senior economic director at the NAACP; Victoria DeFrancesco Soto, senior analyst for Latino Decisions and a visiting scholar at the University of Texas at Austin; Alyona Minkovski, host of "The Alyona Show" on Russia`s international TV network, RT; and Stephen Carter, author of the new novel, "The Impeachment of Abraham Lincoln", and law professor at Yale University, a columnist for "Bloomberg View".

I`d just cracked into the book and it`s excellent and I loved your previous work. So, I think everyone should go out and get it.

So, I found the subtext of everything that happened this week, the NAACP`s convention, fascinating. I mean, Mitt Romney went there to speak and, of course, the background underlying thing that`s happening is in D.C., there`s this trial happening about whether Texas is going to be able to loose itself from the restrictions of the Voting Rights Act.

It was interesting that Mitt Romney did not address this at all when he was before the NAACP.

DEDRICK MUHAMMAD, NAACP: Absolutely. Particularly since Attorney General Holder has spoken I believe that Monday and Mitt Romney spoken Wednesday. And, you know, as Biden would say the following day, voting rights has been the key aspect of what the NAACP has been about.

But I think, you know, when you look at the Mitt Romney`s speech, and you look at some of the reactions to Romney speech, you understand that reaction because you really wasn`t speaking to the needs and concerns of the constituents he was talking to. And, you know, it was not only what he said, but what he didn`t say.

And the fact, as you brought up, that his father took a strong stand on the voting rights and he couldn`t mention voting rights on his speech to the NAACP in Texas, while there`s a major lawsuit going on about voting rights shows to me that either he doesn`t take that issue seriously or wasn`t taken that address to us seriously.

HAYES: But it seems to me also that there`s this -- there`s this -- there`s this situation in modern politics where the racial politics and the racial history are also embedded in a system in which there`s just this, there`s a split among African-Americans in their voting behavior that`s unlike basically any other sub-demographic in American life, right? So you have this situation in which 95 percent of black voters are going to vote for your opponents, right?

So, it creates this bizarre political relationship. I mean, there are some people who are saying, what the heck do you want him to do with the NAACP? I mean, he`s a Republican and no one in that room practically is going to vote for him, so he went in and he made the speech.

What do you think, Stephen?

STEPHEN CARTER, YALE UNIV.: Well, on the one hand, I give him a lot of credit for showing up and taking those boos and he kept on smiling. And that`s not an easy thing to do these days. On the other hand, certainly, all the criticisms of the speech are fair, and not only that he didn`t talk about voting rights. But actually, remember when he got booed when he mentioned Obamacare.

HAYES: Obamacare, yes.

CARTER: That he said the affordable act possibly would have gotten a different response.

But having said that, I do want to say something about the Voting Rights Act and in particular about this problem of voter IDs.

HAYES: Yes.

CARTER: And I think it`s true. A lot of bad people for a lot of bad reasons are fighting for these laws. But we also have to recognize that the resistance to these laws is it`s at best a rear guard action. We`re moving to a national security future in which everyone is going to have to prove their identities several times a day for all kinds of things. And in the end, we`re going to have to accommodate ourselves to that reality. Painful it`s going to be.

HAYES: You know, I was -- I was just on a book tour in Seattle and I went into an office building in Seattle to meet with some folks. And I went right into the building and just they were like on the eighth floor, and I went up to the eighth floor and I was like, is no one checking my ID?

And I realize now that seems strange. Of course, walking into a building seemed like something one just did before we created this system of constant checks.

CARTER: As opposed to getting into this building this morning, for example.

HAYES: Yes, which is basically like, yes, Ft. Knox.

VICTORIA DEFRANCESCO SOTO, LATINO DECISIONS: In Texas, what we`re seeing is this perfect solution looking for a problem.

HAYES: Right. Right, that`s the issue.

SOTO: As we were looking earlier, Chris, and you were talking about this, that there is no evidence of systematic vote fraud, however there is systemic evidence that such measures do suppress turnout. And, you know, I have no problem with an act like this if the cost of suppressing turnout is really going to fight voter fraud.

But we know it doesn`t. There was a study done in Texas where we saw that you need a valid form of ID. Invalid form of ID doesn`t just mean a driver`s license. That means it has to be up-to-date and have your valid name on it. If you get married, you change your name.

HAYES: Right.

SOTO: That means that if you look at the face of it, 91 percent of Latinos could vote, but when you put in that valid point -- that`s 88 percent among African-Americans that goes down to about 82 percent.

HAYES: Right.

SOTO: That is a discrepancy which does not gel with section five. And the data is there.

HAYES: Right.

MUHAMMAD: I want to take a it back to the question that you asked. What would you expect someone like Mitt Romney to say, someone who get maybe at most 5 percent of the vote.

HAYES: Right.

MUHAMMAD: I mean, what I would suspect is kind of what McCain did. I mean, the Republican Party really wants to bring in African-American voters and now, we`re just having a irrational prejudice --

HAYES: No, I wasn`t implying that.

MUHAMMAD: -- that used to vote Republican.

HAYES: Sure.

MUHAMMAD: But then when the political interest, when the political line of the Republican Party changed, then the African-Americans started voting for Democrats. McCain, when he came he gave a pretty -- more of a detailed speech, really trying to laud his policies, there might have been disagreement, but I think it was a very respectful speech.

I feel -- with Romney speech, it wasn`t so. It was taking a lot of potshots, a lot of his answers about what he -- potshots against NAACP policy and then his solutions were just really rhetoric. It was just like free enterprise, really no explanation.

HAYES: I want to play a clip of him making an appeal that I thought was sort of a classic one. This is him at the NAACP convention in Houston, saying, you know, peer into my soul.

MUHAMMAD: That`s right.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I believe that if you understood who I truly am in my heart and if it were possible to fully communicate what I believe is in the real enduring best interest of American -- African-American families, you would vote for me for president.

If you want a president that would make things better in the African-American community, you are looking at him.

(APPLAUSE)

ROMNEY: You take a look.

(END VIDEO CLIP)

HAYES: Again, a tough sell, but what was -- what was the distinction between the McCain speech and the Romney speech to you?

MUHAMMAD: We`re like -- I mean, McCain when he spoke it was 2000 and he was talking about educational policy and he gave a lot of specifics about things he would do, about tax credits, about greater bonuses and awards where teachers who were in low-performing areas, while Romney was saying things more like peer into my heart -- very general things and we have to free the market and somehow things will magically get better. And then specifically saying we`re going to get rid of the Affordable Healthcare Act which is one of the greatest promises of closing some racial disparity, with health insurance.

ALYONA MINKOVSKI, "THE ALYONA SHOW": Well, saying things like peer into my heart don`t work because if we`re going to address any voting bloc, I think no matter how dishonest maybe the effort might be -- like if you want to talk about Mitt Romney speaking with the NAACP, then I still think you need about things like the Voting Rights Act, but focused issues, right? Why don`t you talk about stop and frisk policies? In New York City, why don`t we talk about the drug war? Why don`t we talk about things that actually affect this level of the population or this group?

And then I think that, I think it`s not only about race, but I think a certain level of class applies here, too, right? Why would voters necessarily believe that Mitt Romney is going to do anything for African-American lower income population if Wall Street are his biggest donors?

(CROSSTALK)

SOTO: And let`s compare it with the NALEO speech.

HAYES: Right. That`s a great comparison, actually. Good point.

SOTO: OK. So that level of detail that McCain had the NAACP, Romney had it in NALEO.

HAYES: NALEO, if we could explain what NALEO is, it`s National Association of --

SOTO: Of Latino Elected Officials, which took place a couple weeks ago in Orlando.

Romney showed up and he bashed the president over the head with immigration. Yes, you could feel the breath in the room just be taken. But then he went on to lay out a detailed approach of what he would do with immigration. He`d say I`d enforce the borders a little bit more, I would raise the caps on family reunification visas. I would increase work permits.

So, he went down the line. You didn`t necessary like his position on immigration, but here`s my alternative. Romney in saying, we`re going to do away with Obamacare, didn`t say, but here are my projects X, Y and Z of the alternative.

HAYES: And that is the difference I think between trying and not trying, right? Between --

CARTER: But still, even so, I think that before we go too far down the partisan road, we have to realize --

HAYES: Please? Keep us honest, Stephen.

CARTER: -- that the flip side of what you said in the intro, Republicans have no reason to go after the black vote in the serious way because black people aren`t going to vote Republican.

For the same reason, Democrats have reason to actually give anything to black voters as a group because they know they`re all going to vote Democratic. And if you look at the data, one of the things you find is that the situation of poor, black people is just as a bad under Democrats as it is under Republicans.

HAYES: Let`s talk about -- Dedrick here wants to respond to that -- let`s take a quick break and let you get back at that.

And, Stephen, you made a point in which people have made in a variety of different ways, both under President Barack Obama and previously about the Democratic Party`s relationship of black voters and the political effects of the fact that African-American voters vote so, in such large numbers and high percentages for Democratic politicians, which is that Republicans don`t have to court them, but that Democratic politicians can take them for granted, essentially.

And I`ve heard this argument in many ways and, in fact, there was some reporting about people being frustrated at the NAACP convention that the president himself did not come, that Joe Biden did not come instead, and thought that was perhaps some kind of a slide.

What do you, how do you see that, Dedrick?

MUHAMMAD: Again, just the point about that African-Americans won`t vote Republicans. I don`t believe that. It`s not that we won`t vote Republicans, I think that oftentimes Republican Party is not providing much for African-Americans to want to vote for them.

HAYES: Right.

MUHAMMAD: So, putting the honest on the African-Americans that we have prejudice, I don`t buy into it. And I think they do need to court us, just like Republicans need to court Latinos, just like every year, Democrats are talking about -- because Democrats haven`t won the majority of white vote since Kennedy or something like that. So, constantly courting white male vote. So, yes, all constituents should be courted.

Mitt Romney -- I don`t think did a very good job and didn`t do a very good job courting African-American vote, NAACP vote. And instead of saying, oh, there is nothing for him to do, he just needs to actually -- there is records of people who stood by conservative principles who made a much better, even George Bush, I believe, like 10 percent of the African-American vote and I think he did court the African-American vote. So, there is --

HAYES: I want it be clear, the reality of American politics to me in this respect, in the post-civil rights era particularly. I mean, there`s a different coalition that sort of pertains to same New Deal to the signing of the Civil Rights Act. But in post-civil rights era, you have to choose as political party whether you`re going to have black voters or the white racist vote. You can`t have a coalition that has them both together.

I mean, that`s just the reality of American politics. I`m sure people will be offended by that.

And I`m not -- I just want to be clear. I`m not saying that all Republicans are white racists. I`m saying that the white racist is going to go to one side and black vote is going to go to the other because why would you have a political coalition that both of those elements in them?

SOTO: That social conservatism -- that`s something I`ve always wondered, because with Latinos, the Republican Party tries to reach out and saying, you`re socially conservative and we`re socially conservative. You guys are church-going folks. We`re church-going folks.

Black folks, church-going folks, also socially conservative and I`m just always surprised that there isn`t more of a push.

He mentioned it in his speech briefly, saying I will defend marriage.

HAYES: Right.

SOTO: But just in passing. So, I was surprised he didn`t try to establish more of a connection like that and just the broader strategy of Republican politics.

MINKOVSKI: Well, I think it`s hard to do because the overarching theme of some racism and some prejudice that is involved. But, you know, if we can just go back to the point of maybe the Democrats take advantage of the black vote, I think that`s a problem the party has in general, is there`s an assumption not only African American voters are going to vote for Barack Obama, again, but it`s also the environmentalists are going to vote for him again, it`s also the gay voters that are going to vote for him, again, no matter what happens. And that`s why we`ve seen the Democratic Party just move to the center because the people they`re actually trying to court now are those middle-of-the-road voters and not the others.

HAYES: Right. Although that logic, I mean, the amazing thing about that logic should pertain, right, in classical political science median voter theory, right, it should pertain on both sides, but it doesn`t, right? So, it seems to pertain only asymmetrically, which I think is frustrating.

MINKOVSKI: It`s a problem.

CARTER: But I think it does pertain on both sides and that`s one reason that the Republican Party lost the last election, that is both parties have a problem. Both parties have a fairly solid base, with fairly well-defined interest -- a base that they pay lip service to because the truth is, the Republicans, if you look at the actual record in office, they never actually give much to the social conservatives.

HAYES: The social conservatives.

CARTER: The social conservatives. They talk to them and talk about them, but the bills they pass not that much. They both have that.

They`re fighting -- both parties are fighting over the same small group of independent voters.

HAYES: I would just push back a little bit on that. I think that may be true somewhat at the federal level. I think at the state level, that`s not true. I mean, when you look at restrictions on abortion --

CARTER: That`s what I was going to say. And actually, Republicans get more black votes at the state level than they do at the federal level, also, which is a very distinction. And it`s also at the state level, it`s in the local churches that you find these various conservative groups going around and trying to do outreach, not as much they do 10, 15 years ago, but trying to do outreach based on the social conservative ideas that you mentioned.

HAYES: I want to read this comment that Romney then made about his own speech, there`s no sound of, but just a full report.

He`s talking about getting booed. And he said, when I mentioned -- this is him in a Montana fundraiser the same night.

He said, "When I mentioned they were going to get rid of Obamacare, they weren`t happy. I didn`t get the same response. That`s OK. I want people to know what I stand for. If I don`t stand for what they want, go vote for someone else, that`s just fine. But I hope people understand this, your friends who like Obamacare, you remind them, if they want more stuff from the government, tell them to vote for the other guy -- more free stuff."

SOTO: What a great mobilization speech. I mean, you know, hindsight is 20/20, and then hindsight maybe they should not have invited a representative from either campaign, because what this does is it`s going to mobilize the base.

My question is, is this going to mobilize the black base? Is this going to anger the constituents the NAACP to go back and fight stronger? So, this is a win/win. It just mobilizes everyone?

MUHAMMAD: Well, I mean, I do think it`s important that NAACP invite both presidential nominees to come because, again, I think -- there is --

HAYES: Right, because this gets to the exactly what we`re talking to.

MUHAMMAD: And true, and we want more from both parties to address our issues, right? Democrats and Republicans who have the opportunity to have that interaction. But this whole free -- I mean, Rush Limbaugh and others are taking it like really slamming down this whole free stuff piece and just the idea that minority voters just want free stuff while hardworking, middle class and unsaid and white people don`t want free stuff.

I mean, you k now, this country in many ways was founded on free stuff, meaning the land. It took some genocide to get to the free stuff --

HAYES: And free labor.

MUHAMMAD: And free labor, right? So, I mean -- and more recently, the great white middle class was built on a lot of free stuff, on a lot of free higher education, on a lot of free access to highways of suburbia to be developed in subsidies on homeownership.

So, you know, just the idea -- it`s been such a racist point in the past. I`m hoping Mitt Romney wasn`t trying to go down that road, but I believe some of the more extreme Republican activists are usually that`s going down on that road.

HAYES: Of course, there`s the welfare queen, the infamous strapping young buck of the mythology of Ronald Reagan buying a t-bone steak.

HAYES: A jaw-dropping new study this week provides insights into what`s driving the seemingly relentless tide of scandals on Wall Street.

A survey conducted by a law firm Labaton Sucharow found that at least 30 percent of professional services found that they feel pressured by their bonus plan to act unethically or illegally, 39 percent said they believe their competitors are unlikely to have engaged in unethical or illegal activity. In this week alone, we have a fresh spate of financial scandals that seem to confirm the reports` results.

On Tuesday, federal officials accused Iowa-based brokerage firm Peregrine Financial of fraud and arrested CEO Russell Wasendorf after he apparently attempted suicide and left a note saying he stole more than $100 million from customers.

On Thursday, Wells Fargo agreed to pay $175 million to settle claims that its brokers added what the Justice Department called, q quote, "a racial surtax to the loans of black and Hispanic borrowers."

The next day, JPMorgan revealed some of its traders may have sought to cover up the bad bet that contributed to its $7.5 billion trading loss.

And, last night, "New York Times" reported that federal authorities expect to file criminal charges against the banks, the center of the massive scandal involving the rigging of the key interest rate known as LIBOR. We talked about that on the show last week.

Joining me now at the table are Edward Conard, former partner at Bain Capital and author of "Unintended Consequences: Why Everything You`ve Been Told About the Economy is Wrong", and Alexis Goldstein, a former information technologist at Merrill Lynch and Morgan Stanley, now a member of Occupy the SEC.

It`s great to have you guys here.

ALEXIS GOLDSTEIN, OCCUPY THE SEC: Thanks for having us.

HAYES: So, Ed, your book is about incentives, partly, and about incentives for investment and risk-taking. And one of the things that I have been struggling with in writing my own book and looking at Wall Street and seeing the sort of cascades of scandals, they just seems that incentives can go in a bunch of different directions.

And one of the ways they can do is to incentivize risk-taking, or wok harder and more performance. But they also seem they incentivize a lot of cheating and a lot of corner-cutting. And it seems to me that the culture of finance has something deeply rotten about it.

Do you agree?

(LAUGHTER)

HAYES: I`m serious.

EDWARD CONARD, AUTHOR, "UNINTENDED CONSEQUENCES": It`s not a loaded question. Well, I just think there is a lot of money changing hands on Wall Streets and in banks and you`re going to expect the bank robbers to be there. So, sure, either criminals involved in that activity, and do we have to look very carefully and supervise those operations, root them out wherever we find them? Of course we do.

And I think every investor has to recognize that, as well. I know in my own personal investments, I spread them over a lot of firms because I`m very fearful that I`m going to find one firm or another, the Bernie Madoffs of the world --

HAYES: Right.

CONARD: -- that are stealing my money as opposed to investing it.

But I do think that society works on 95 percent of the people being honest and cooperating, no matter the supervision, which doesn`t mean that honest people on the margin don`t perhaps do some things that are inappropriate. But for the most part, cooperation is what`s driving our economy and our civilization forward. Much more benefit than costs.

GOLDSTEIN: I would disagree with that because having worked on Wall Street, I mean, everything is a cost benefit analysis. And something that happens a lot, if you look at what would the cost be if we were to violate this particular regulation and what is the ultimate fine? If everything is a cost-benefit analysis, you are almost incentivized, you are incentivized to push the envelope in terms of what`s legal and what`s not legal if you know that when you`re caught the fine that is levied is going to be less than that profit that you make.

We are in an environment right now where we have seen, you know, Glenn Greenwald calls the two-tier justice system, where we have seen 99 percent of the cases that the Federal Reserve has done in bank enforcement actions have not resulted in the bank having done any wrongdoing. So, not only have we not seen anyone go to jail, but people don`t have to admit they did anything wrong when we do see the regulators come in.

So, even before this sort of environment that has happened after the crash, you had this cost-benefit analysis where it makes sense to violate regulations, but, since, we have this culture of immunity for bad behavior on Wall Street.

CONARD: I just don`t think the math works because my experience in business is that people care greatly about their careers. And if they get caught doing something inappropriate or even if they do something appropriate and it doesn`t work out, they often lose their career. And the cost of losing their career --

(CROSSTALK)

GOLDSTEIN: -- the guy that blew up Enron (ph) was able to go off and create a whole new hedge fund.

CONARD: I`m not saying it`s true in every circumstance. But I`d say in the vast majority of circumstances if you get caught with your hand in the cookie jar, if you get caught doing something inappropriate or even if you take a legitimate business risk and it fails, there`s a high probability that your career is coming to an end. And the likelihood that you can get back into the game, again --

(CROSSTALK)

GOLDSTEIN: -- seeing a huge amount of banks that have failed substantially, bailed out by the government, subsidized by the U.S. taxpayers, lending programs by the Federal Reserve and for both the banks and private companies and even some foreign governments and foreign companies, and we haven`t seen any punishment for any of those things.

So, there`s -- again, I say it, again, a culture of immunity and I don`t think that what you`re saying holds true any more and I`m not sure it ever did.

CARTER: Wait a minute, there`s two separate problems here. One is, what are the people like on Wall Street? And I certainly know a lot of them and the people I know are not the people, in fact, who are going to be cutting corners in the way that you describe it.

CARTER: But that`s not the larger point. The larger point is that you can`t tell whether there`s been enough punishment meted out until you`re sure that crimes have been committed, or a very strong civil offense have been committed. And many times the reason both sides settle, the government and the regulated entity is because neither one actually wants to push it. The government might lose the lawsuit and -- or the entity might be taken down in a serious way. That`s why they settled.

But we don`t know in a lot of these cases. We can`t tell from the fact that a bank failed that somebody needs to be punished.

HAYES: Right. But we can -- let`s just to ground it here, right? I mean, in the case of Wells Fargo, OK, we know that there was a compensation structure that incentivized pushing people into subprime loans and that they were doing this practice, pushing people on subprime loans on a racial basis, and these were people who were coming in who were black and Latino, who could have qualify for prime loans, which would have been less expensive, but the compensation structure.

Here`s the DOJ Wells Fargo complaint. "Wells Fargo compensation provided a strong incentive for home mortgage consultants and wholesale mortgage brokers to originate alone as subprime even if the borrower could qualify for a more favorable prime loan. This compensation structure resulted in discrimination on the basis of race and natural origin against African American and Hispanic borrowers, right?

So, this is -- this is a case where we actually do have a settlement and we do have, you know --

CARTER: That`s the complaint, not the settlement.

HAYES: Right.

CARTER: But the same is all true, they got hit with $175 million. Maybe I should have done more --

(CROSSTALK)

HAYES: That doesn`t mean any wrongdoing or not. That`s the point, is that $175 million is nothing. It`s nothing. They barely --

CARTER: I know. They reported $4.6 billion in quarterly profits. I understand that.

CONARD: I think part of the settlement reflects what the government really thought of the case, because if they really thought they had a very strong case, and they could prove it very easily, they wouldn`t have settled for a number like that. Like what --

HAYES: Or, I don`t know if that`s necessarily true.

(CROSSTALK)

CONARD: To avoid the litigation costs that would have gone along with it.

MUHAMMAD: And also, too, because NAACP also was -- had issues around the subprime lending, targeted lending with major banks and we have oftentimes found we`re working with the banks that the most important thing was to try to get a change of practice. I think oftentimes that`s what they settle -- that`s also the government is looking for, not necessarily even that we don`t have a strong case, but the most important thing is what can we do now and that`s the $175 million is for, is to help people who have -- who are in trouble around foreclosure and have had unsustainable --

HAYES: We have Bill Black, who is a professor and also a former regulator. He specialized on financial fraud. We`re going to bring him into the conversation, right after this.

(COMMERCIAL BREAK)

HAYES: I want to bring in Bill Black, professor of economics and law at University of Missouri, Kansas City, and author of "The Best Way to Rob a Bank is to Own One".

Bill, I want to get your thoughts on this, is something you spend a lot of time thinking about and also as a regulator, as a criminologist looking into about what the kind of conditions are that do produce either ethical corner-cutting or actually outright illegal behavior.

WILLIAM BLACK, UNIVERSITY OF MISSOURI: Sure. So, we talk about criminogenic environment -- environments that produce epidemics of fraud. And we can give you empirical evidence on the debate you just been having. So, for in the savings and loan crisis, for example, detailed investigations, the report of the national commission found that at a typical large failure, fraud was invariably present.

We know that if you use a compensation system, you can produce endemic fraud. So, fore example, over 10 percent of the appraisers in this nation signed a petition begging the United States to take action against appraisal fraud. We found in investigations that WaMu, Washington Mutual, had a black list of appraisers and you got on the blacklist if you refused to inflate the appraisal.

Now, think about that. There is no reason why an honest banker would ever inflate an appraisal. And that happened routinely and evidence shows that over 75 percent of appraisers were subjected to coercive actions always to inflate the appraisal and that this came from the lenders. And note that it doesn`t take 100 percent of the appraisers to go bad for fraud to become endemic because you simply use the 7 percent of appraisers who are happy to inflate the appraisal. You send them all the business.

And same thing happened in the credit ratings where you had this absurdity of AAA ratings for things that weren`t even single C. So, this is 20-plus grade inflation that happened absolutely routinely over 22,000 times in connection with the toxic waste.

It is not true that 95 percent of the time, if you leave people alone, they will do the right thing. If cheaters prosper, then it creates what we call aggressive (ph) dynamic in which bad ethics drives good ethics out of the marketplace.

HAYES: Ed, I want you to respond to that.

CONARD: Sure. When you look at the micro evidence, you`re going to find cheating, rent seeking going at all levels. I certainly agree. That`s the way the world works.

But if you go to the macro level, look what happened to you U.S. real estate prices relative to Europe, for example. Our real estate prices did not rise more than Europe. So, they were actually empower and Germany was integrating eastern Germany, and Japan was suffering a big real estate boom. So, those economies differ from the rest, but our real estate prices didn`t rise more than them.

So, I don`t doubt for a second that there were appraisers who were making inappropriate appraisals. But did that drive our real estate markets up to the level that it drove? I don`t see the macro evidence to say it was endemic, for example.

BLACK: Let me give you the macro evidence. Studies found that 90 percent of stated income low-documentation loans involve fraud. Investigations determine that these are almost invariably produced by the lenders and their agents.

How many of these low documentation loans were there? By 2006, it`s roughly half of all the loans made in the United States. You`re talking about millions of fraudulent loans and they drove the hyperinflation out of the bubble in the United States.

CONARD: We would have seen --

(CROSSTALK)

HAYES: Well, wait -- but, this question about -- I mean, there`s also the question about whether there`s a lot of fraud in other places, as well. I don`t want to necessarily -- I mean, having read into the Spanish real estate bubble, which was massive and, in some ways does look like ours, it seems like possibly a tremendous amount of all sorts of fraud happening in Spain, as well.

BLACK: And in Ireland.

HAYES: But, can we go back to this compensation question to me because that is really kind of at the core of this, is that my theory on this, and I would like to get your thoughts on this, is that like, you know, everybody`s got a price and the larger the absolute payouts, the more likely it is that price to find you.

Meaning, if someone comes to you and says like, will you do this thing that is kind of dodgy and here`s $5,000? You`re like, ahh. Will you do this thing that`s kind of dodgy, here`s half a million dollars? Will you do this thing that kind of dodgy, here`s $5 million? You said, well, all the good I could do with that $5 million, I could donate it to non-dodgy enterprises --

CONARD: Exactly the opposite in my theory.

HAYES: I know -- yes, I want your respond to that right after we take a break.

And businesses lead the world.

(COMMERCIAL BREAK)

HAYES: So, Ed, I want you to respond to this idea, this idea that, you know, when the payouts get big enough and I think the sort of the payouts operate on different people in different ways. I mean, here`s -- there`s, there`s this interesting combination of status-seeking, right, because the number -- it`s like at a certain point, you know, people, my bonus can be $10 billion, $15 million, what exactly is the marginal utility of that extra $5 million. How many more yachts I`m going to buy, or whatever the -- it`s the status, the number that you walk around with, that`s your grade. You get to say, I`m an A-plus student, basically.

And then there is this, on the other side, it`s trying to kind of cover your track if you screwed up. This is the JPMorgan Chase SEC filing about their own estimated of earnings and traders in the office that has made this trade expect to mark their positions where they would expect to be able to execute in the market, recently discovered information raises questions about the integrity of the trader marks. Basically, they were plunging the trader marks to hide their losses because they were -- they didn`t want their losses to be exposed, so just certain individuals may have been seeking to avoid, showing the full amount of losses, being incurred and the portfolio during the first quarter. But you disagree with this sort of picture of motivation that I`m painting.

CONARD: Well, I think the circumstances matter. So, the people`s careers are a lot more valuable than their yearly payoff. And I think if you went to somebody and said, I`d pay you $1 million, $5 million, $10 million do something illegal, might you be able to motivate them? Sure, as a past (INAUDIBLE).

But I think what you find is the people who are making $5 million a year were making $5 million last year and the year before and the year before. They worked hard as -- you know, to get all A`s and to get a job and to work their way up into their positions and they look forward to the future, and they see $5 million payouts for 10 years coming.

I think they`re very careful about jeopardizing all they have worked for and all that comes next. Those aren`t -- so, they`re less motivated by the path, and when you get to those levels, there is high, high, high visibility. So --

MUHAMMAD: What about below those levels? Like more so with total mortgage and mortgage brokers and these types of things where all of a sudden they`re making $60,000, $80,000, $100,000 that was kind of big money. But it seemed to be almost endemic the amount of unsustainable mortgage being pushed forward.

So, I`m just wondering how that theory works? I mean, if you know you have career making millions of dollars for years, so I can understand you`re being a little more cautious.

GOLDSTEIN: Well, I even disagree with the millions of dollars a year because I worked with traders, and the behavior of traders is essentially that if you start to lose money in your book, you go for broke. It`s the Bermuda trade, right? You double down, if you pull yourself out of the hole, then you make a great bonus. If you don`t, then you get fired and in your pocket, a one-way ticket to Bermuda or Brazil, or wherever, right?

And a lot of these traders who blow off can they go off and form hedge funds just because they made a name for themselves as great risk-takers, even though they are usually terrible risk-takers. So, I actually don`t think it ruins your career when you`re paid millions of dollars a year, at least if you`re a trader and you blow up.

CONARD: You have to be very careful about the Bermuda trade because when people do lose money --

HAYES: It`s amazing that is a thing. It points to the culture.

CONARD: There`s a lot of supervision in banks for this very thing because we know when people lose money, including banks in total, that they will double down trying to save themselves. It`s a big problem.

HAYES: I want to get Bill to respond to this, but quickly, we should make the distinction between -- I mean, so there`s bad risk undertaken not fraudulently, just bad management of risk, right? Doubling down on a bad trade and there`s being deceptive, saying, you know, calling the person submitting your LIBOR bid and saying, can you nudge it half a basis point --

GOLDSTEIN: But you usually when you double down on the trade, you`re violating internal risk controls, then you usually do have to hide it. So, most of these traders that blow up are also hiding their numbers.

HAYES: Bill, I want you to respond.

BLACK: OK, we don`t have to guess about these things. There`s a whole field called criminology that has researched this for years. So, first, it isn`t just the dollar amount, it`s the fact that you get it early. So, modern executive compensation is perverse and everybody agrees with it in terms of the short term payoff.

Second, it`s large.

But, three, it`s sure. This is the Nobel laureate George Akerlof in his famous 1993 article, "Looting: The Economic Underworld of Bankruptcy for Profit," where he emphasizes the great thing about accounting fraud is it`s a sure thing.

And the fourth thing is it`s the opposite. You lose your job if you refuse to engage in the fraud.

So, the average CFO in America has a tenure of three years. Now, that`s all kind of problems to begin with. You`re never going to get a long-term perspective out of that. But --

HAYES: Yes, hold that thought right there, hold that thought, Bill. We`re going to keep you on the line and we`re going to come back. I want to keep talking about this. You had a response to that, Ed.

We`ll get right back into it after the break.

(COMMERCIAL BREAK)

CHRIS HAYES, HOST: Hello from New York, I`m Chris Hayes.

Here with: Dedrick Muhammad, senior economic director of the NAACP; Edward Conard, a former partner at from Bain Capital, we`ll be talking about your time there in a bit; Alexis Goldstein, former vice president of information technology at Merrill Lynch and Deutsche Bank, now a member of Occupy Wall Street; and Stephen Carter, law professor at Yale. And joining us on satellite is Bill Black, professor of economics and law at the University of Missouri, Kansas City.

We`re talking about the week that we`ve seen on Wall Street, just in a week of Wells Fargo settlement of racially bias practices that cost black and Latino borrowers` money.

We have seen more come out of the LIBOR scandal that is metastasizing in England and a "New York Times" piece in the paper today saying that the Justice Department is looking to build a criminal case around it.

We saw the case of a broker, dealer in derivatives called Peregrine that looks like a mini Madoff situation in which a guy stole $100 million of his client`s money, and what the sort of culture or finance is and whether or not it`s systematically driven towards corner cutting, whether ethically, legally or regulatorily.

And, Stephen, something you want to say. Yes?

STEPHEN CARTER, YALE UNIVERSITY: Well, even -- suppose it`s true about finance. But that`s actually a kind of smaller picture of something that`s true largely in American life. Corner-cutting seems endemic to a lot of the things that we do, and the same kind of practices you refer to, pushing people into subprime loan was a terrible thing to do.

On the other hand, it begins from the same faulty notion that: (a), everybody`s biggest asset should be their house, which is a crazy investing rule, and, (b), you need to maximize your consumption. You need to be able to get out and buy more stuff and get more stuff where you`ll never be happy.

You see the same pressure on both ends. You see doing greater damage when you see it happening sometimes at the top. But it`s actually endemic to the cultural --

HAYES: So, your indictment is that the entire culture in America is corrupt, not just the culture of finance. I just want to be clear here.

CARTER: It`s not -- corruption is the wrong word. You can use it if you want to, that we have a culture that encourages constant consumption, constant exercise of desire. And here I`m talking about desire like I want to buy that thing -- and if you`re going to have that culture, people are going to find ways to cut corners to get the things that they want.

EDWARD CONARD, FORMER BAIN CAPITAL PARTNER: The only thing, you can focus on the good or the bad. Everything has costs and benefits.

If you look at the United States, we added 40 million jobs on the base of 100 million employees in the mid 1980s. Europe and Japan grew half as fast.

HAYES: Right.

CONARD: We increased our productivity from 1.2 percent a year growth rate to 2 percent while theirs fell.

We created, we brought 20 million immigrants and pulled them into our country to satisfy our demands for employment and we educated their children. We put tens to millions of people to work offshore.

When you really step back and look at the mackerel level how our economy has performed relative to Europe and Japan, and with all the cost cutting and all the things that have occurred, our working class incomes have grown twice as fast as theirs. On a per person basis, but total basis and total number of employees, we have put 40 million people to work and they`re less than half as much as we have.

HAYES: You`re talking about Europe and Japan.

CONARD: The two other high-wage economies that are the real-world examples.

HAYES: Right. But the other thing is that, in terms of job creation -- I mean, if we look at the last decade and the decade that this stuff is happening, the decade in which traders in the London office of Barclays were calling up the people submitting their LIBOR bid and saying nudge it down so I can --

CONARD: Until the financial crisis, we have some of the highest workforce participation and the lowest unemployment number.

HAYES: Sure, until the financial crisis. That`s like saying I was perfectly healthy until I was horribly cancer-stricken. The point is that you can`t separate, the core from the outer.

CONARD: And the question is what caused the cancer, OK? And now we can relate it back to whatever you relate it back to. What I would tell you is that the cancer that you`re describing is caused by a massive withdrawal from our banking system.

HAYES: This is a bank run, had nothing to do with anything that was happening in the run up to it.

CONARD: If we don`t re-circulate that short term, we will have high unemployment and slow growth, exactly as we have now when the money isn`t circulating. That when we attack the banks, instead of the bankers who are doing illegal things, and we focus only on the corner cutting and not the things that are beneficial, we end up with $1 trillion in the banking system undeployed, $2 trillion in corporation undeployed, high unemployment --

HAYES: Here`s my theory for why it`s undeployed, here`s my theory of why it`s undeployed. If I knew -- if I was one of those people surveyed that said 40 percent of my competitors will do illegal or unethical things to do, you know, to get ahead, if I was one of the people who said my compensation structure incentivizes illegal behavior, if I was one of the people who was -- knew those traders on the desk --

CONARD: You would have done that in 2007 --

HAYES: But now that I`ve seen it all blown up, I would not trust the system and I would silt on my money as I as a personal individual am doing right now because I don`t trust the system because fundamentally the system seems untrustworthy.

(CROSSTALK)

ALEXIS GOLDSTEIN, OCCUPY WALL STREET: You`re seeing people pull their money out of their brokerage accounts, people think the game is rigged and nobody is investing, banks are scared to loan to each other. We`re in a climate of fear and it`s got nothing to do with -- you know, it has everything to do with the fact that we see this massive corruption and nobody charge the system any more.

CONARD: I`ll give you an alternative view.

HAYES: Yes, please?

CONARD: OK? We used to believe that implicit government guarantees will hold all the short-term debt in place, and we woke up in 2009 and recognize they don`t work, and that there`s enormous risk of damage from withdrawal. And we have to hold money aside now to fund those withdrawals in the event of another case. If it`s sitting on the sidelines to fund withdrawals, it`s not funding your houses, it`s not funding your businesses,. it`s not creating employment and business and growth.

HAYES: Let me explain this in lay terms and then I want to get Bill Black in here.

Right now, obviously, the FDIC, the idea behind the FDIC and the program of deposit insurance was the fact that in the wake of the bank run that precipitated the great depression, that financial crisis in 1929, that that bank run was, we never wanted to have one of those, again. Federal Deposit Insurance Corp was set up to ensure people`s accounts so in the midst of a panic, people wouldn`t run to their banks. Of course, banks have liabilities in excess to reserves, which means they lent out more money than they have. That`s the purpose of a bank in some senses. If everyone goes to get the bank at the same time and the bank will then be bankrupt.

Right. So, we guarantee it.

What you`re saying is something like that happened in the short-term funding market, which is there is a whole bunch of complicated ways you can describe what the short term market looks like, but it essentially is a run on the banks and so we need something like, not necessarily FDIC, but what is happening in the short-term lending market.

(CROSSTALK)

CONARD: And we understand there`s 800 years of history.

GOLDSTEIN: And what happened is all these banks were repo`ing out. And what that means is the short term funding, right?

I have all of these assets. They are all mortgage-backed securities, or CDO-squared, and I`m using those to fund my payrolls and pay my day-to-day bills and I go to the repo market overnight and say, I`m going to loan this to you overnight and in the next day instead of buying it back, like I`m supposed to, I just renegotiate the terms of the deal.

When everyone realized that all of these AAA ratings weren`t worth anything, all of a sudden the repo markets froze up. And so, the fact that all these banks are doing all their payroll and everything else based on short-term lending is a terrible model.

CONARD: You`re looking at one side of balance and not the other.

GOLDSTEIN: That is the reason that everything fell so hard and so fast.

CONARD: This is what banks do, they put the short-term money to work. What do the financial markets do, they put the long term money --

(CROSSTALK)

HAYES: Bill, Bill, Bill, I want you to respond to this sort of, the degree to which we can sort of untethered what happened in the crisis from the run to the ball, because I think the most, in some sense, novel and provocative thesis in your book is precisely that, right, is distinguishing the real estate market and the way the credit markets look and the mortgage bubble and all those things in the run up to the crisis from the crisis itself, and you kind of detaching those two things, is one of the provocative --

CONARD: The run up before the crisis looks a lot like the rest of the world.

HAYES: Bill, I want you to respond to that.

WILLIAM BLACK, UNIVERSITY OF MISSOURI: The rest of the world has a whole lot of accounting fraud as well. So, you can`t assume that the rest of the world doesn`t have fraud.

Look, it`s really bad for an economy to have this kind of fraud. If you allow aggressions dynamic to exist, if cheaters prosper, then we have known for centuries, swift talks about this, of all things in Gulliver`s Travels, that you`re going to have fraud become predominant and you get crony capitalism and you get weak growth.

So, enforcing the laws against fraud and preventing the criminogenic environment in the first place is a really good thing for an economy. How do you do that? First, you stop executive compensation and professional compensation from being set up in the perverse way they are now.

Second, you get rid of the three D`s, which are deregulation, de-supervision and de facto decriminalization, what your guest have been talking about, the death of accountability. Akerlof and Romer again say when you deregulated the savings and loan industry what we failed to understand was that this was bound to produce widespread looting.

Well -- and they said, now we know better. If we have an economic theory, and if we follow it, we don`t have to have these crises. We did the opposite. We deregulated, we desupervised, we failed to prosecute.

Out of the savings and loan crisis, we did over 1,000 felony convictions in major cases. In the current crisis of the folks who drove it on Wall Street, we have zero. And, so, yes --

GOLDSTEIN: And a key point, Bill, some of the deregulation made the crisis worse. The 2005 changes to the bankruptcy code that made derivatives debt senior, and what that means is if a company goes bankrupt, all assets get frozen, except for derivatives. They are exempt from this thing called the automatic stay.

So, when everything gets frozen derivatives and counterparties get to pull all their money out first and that`s what happened in the wake of the crisis is that everyone freaked out because they knew that was the case after the 2005 changes.

HAYES: Thank you for coming on, professor of economics and law at the University of Missouri, Kansas City.

And, Alexis Goldstein, former information technologist at Merrill Lynch and Morgan Stanley, now a member of Occupy the SEC -- thank you for joining us. We really appreciate it.

All right. Mitt Romney said he left Bain Capital in 1999, several documents say otherwise. We`re going to ask our guest, former Bain partner Ed Conard for the inside story, exclusively, right after this.

(COMMERCIAL BREAK)

HAYES: President Obama yesterday hammered away at Mitt Romney`s record as head of the private equity firm Bain Capital, after new evidence suggested that Romney may have remained at the firm longer than he`s previously stated. A rack of new documents unearthed by "Talking Points Memo," "Mother Jones," "The Boston Globe" and Current TV indicate that Romney held the title of chairman and chief executive of Bain Capital until 2002, despite claims by Romney that he left the firm in February 1999 to run the Olympics in Salt Lake City.

On this SEC document from February 2001, for example, Romney is listed as Bain Capital`s chief officer, president and managing director. And Romney lists his principal occupation as managing director of Bain Capital Inc.

The discrepancy matters because Bain Capital closed down several companies and laid off hundreds of workers, in some cases, sending their jobs overseas, during the period in question.

And Mitt Romney sought to distance himself from those deals. President Obama hit Romney on the outsourcing claims yesterday in Virginia.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Let`s stop giving tax breaks to companies that are shipping jobs overseas. Let`s give tax breaks to companies that are investing right here in the United States of America.

Mr. Romney`s got a different idea. You know, he invested in companies that have been called pioneers of outsourcing. I don`t want to pioneer in outsourcing. I want some in-sourcing.

(END VIDEO CLIP)

HAYES: Despite the new documents, in a series of interviews with five different networks on Friday, Romney continues to say he was no longer involved of Bain operations after 1999.

Here`s Romney on NBC.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: In February of 1999, I left Bain Capital and left all management authority and responsibility for the firm. I had no ongoing activity or involvement in the affairs of Bain Capital because I went out to run the Olympics. I don`t recall a single meeting or single participation in an investment decision by Bain or personnel decision.

(END VIDEIO CLIP)

HAYES: This despite Romney`s own testimony from 2002 obtained by the "Huffington Post" that he attended board meetings for companies Bain Capital invested in, such as Staples during the period in question.

I want to welcome back to the table, Victoria DeFrancesco Soto, communications director at Latino Decisions; and Alyona Minkovski, host of "The Alyona Show" on RT, Russia`s international TV network.

All right, Ed, we are confused. America is confused. If -- who -- if Mitt Romney was not running Bain in 1999 to 2002, who was running Bain? Why doesn`t that person just comes forward and say, I was running Bain?

CONARD: Yes, there was a management committee running Bain to try to transmission from Mitt to a new structure. So, Mitt announced that he was going to leave to run the Olympics. It was in fairly short order. Mitt`s names were on the documents as the chief executive and sole owner of the company.

And it took several years for us to sort out how to put the management team in place -- there was a management team in place already, but, for example, we had to negotiate with Mitt because he was an owner of the firm. He created a lot of franchise value and we`re going to pay him for that. We had to recognize that other partners would leave, senior partners would leave over time. That whatever we did for him was going to be reflected in what we did for everyone else who left. And we had a very complicated set of negotiations that took us about two years to unwind.

During that time, a management committee ran the firm and we could hardly get Mitt to come back to negotiate the terms of his departure because he was working so hard on the Olympics.

HAYES: OK. This is actually interesting. The reason that the three years happened, he stays -- he is the chief executive officer during this period of time.

CONARD: Legally on documents, I suppose, yes. But he has no, he`s not attending any meetings.

HAYES: No meetings at all. He never showed up at any meetings?

CONARD: I`ll tell you this -- it was 10 years ago, so can I remember every single meeting? No. But I remember that Mitt was gone, we had a management team that was working hard to manage the company. We`ve had to negotiate the terms of Mitt`s departure, and in fact, everybody`s departure at that time. And it was difficult to get any time for Mitt to even get him and his attorneys to do that because he was so busy working on the Olympics.

HAYES: Presumably there`s documents, right, that Bain has that could just --

CONARD: I don`t know if there is, but there`s an offering memorandum for example in 2000 when we went out to raise money --

HAYES: Right.

(CROSSTALK)

CONARD: And all investors recognized that Mitt had gone off to the Olympics and wasn`t involved, and in the fund, he wouldn`t be involved.

VICTORIA DEFRANCESCO SOTO, LATINO DECISIONS: The question is, why didn`t he own it? Right now we`re dealing with the technicalities of it. And people don`t like technicalities. It seems gray.

CONARD: But it is technical.

SOTO: But early on, he should have said, I left in 1999, but my name stayed on there because of these issues. But he didn`t say that. He didn`t say that.

So, right now, it`s coming up to haunt him that he wasn`t clear about it early on.

CONARD: Well --

DEDRICK MUHAMMAD, NAACP: My question is, I mean, to me, I`m not a big Wall Street person in any way. But if your -- if my name is down as CEO, right, whether I`m being actively involved in management or not, and I`m getting compensation for that, even though that might seem like a lot of money to Mitt Romney, seems a lot of money to a lot of Americans, doesn`t he have to be held responsible? I mean, his name is still down. His management team doing it but he still needs to take responsibility for what is happening at Bain during that time period.

ALYONA MINKOVSKI, THE ALYONA SHOW: Doesn`t everyone else find it incredible that Mitt Romney would have thought this through? I mean, what part of the -- Mitt Romney has been running to be president for a very, very long time. This is not his first campaign and so, you would think that you would be able to address these things. You would --

CONARD: I don`t think there`s any question in Mitt`s mind that he left in 1999. I don`t think there`s any question in my mind or anybody --

(CROSSTALK)

HAYES: This is the weirdest thing to me. The name is on the documents. But also, why are you paying him $100,000 a year? I understand in the structure of Mitt Romney`s compensation, that`s essentially a tip.

CONARD: Mitt created the firm, no, Mitt created the firm, he enormous franchise value and so did other partners like myself at the firm, OK? Ands their contribution to the franchise value of the firm have to be recognized. So, when Mitt left, it`s not like people, oh, see you later, you don`t get another dime from the firm. They said, hey, you`ve created something incredibly valuable and you need to be compensated for that.

HAYES: That`s different than the $100,000.

CONARD: You are focusing on the wrong stuff when you think of $100,000. He has a lot of things in the firm but not running the firm like a limited partner who`s got investments in the firm is not running the firm.

HAYES: Let me ask you this, I mean, $100,000 is still -- he`s still being paid and he still has his name on it, right? If, let`s say -- my understanding of Bain during Mitt Romney`s tenure was that there were certain things that Bain would not invest in because of Mitt Romney`s own faith and his world view, things like alcohol, for instance. That there were certain bright lines, right?

Did those bright lines go away in 1999 where there are deals that were made once he was running the Olympics that would have violated this kind of code that he had, which I find quite admirable, actually, that changed after he was running the Olympics?

CONARD: I don`t recall strict bright lines before or after. I think we all looked at everything and said, hey, we have endowments and pension funds and people in our investments who might not want to assume things like gambling, for example. And to this day, I don`t think there`s a lot of those investments in the portfolio, which doesn`t mean we could find some example here or there, but I think there`s been a general feeling, not only in our firm, but in many firms to shy away from some areas of investments as a result of that.

HAYES: When you say this was taking a long time, what was the -- it sounds like he was driving a hard bargain. Is that the issue?

CONARD: Yes, of course.

HAYES: Because, why? Because he -- what was at issue? What were the negotiations? I don`t understand what the negotiations were that created three years. I think part of the problem here --

CONARD: I created an incredibly valuable firm that`s making all you guys rich, you owe me, OK? That`s the negotiation. And now, the next person says, whatever you do for him --

HAYES: Doesn`t he get stakes? Doesn`t he have ownership stake anyway? Isn`t he - -doesn`t he have an ownership stake that that value will increase anyway?

CONARD: There was not -- you have to decide when you`re no longer involved in the firm what would then be the economics for somebody who had really created enormous franchise value like he had. And when you address those issues, you have to turn to other people who say I created a franchise value, too. What about me, what about me?

And so, all partners want to get involved in the negotiation of what it means for him and means something for me, too.

(CROSSTALK)

HAYES: Because that`s the benchmark. He`s the first one to leave having -- after this thing had been created and the negotiation for him is going to create the benchmark for the compensation structure.

CONARD: Of massive significance, yes.

HAYES: Let`s talk more about this and also what`s at issue here, which is this offshoring questions. You`ve got some words on that in your book right after we take this break.

(COMMERCIAL BREAK)

HAYES: We`re talking about the, somewhat mysterious and baffling tenure of Mitt Romney between 1999 and 2002 at Bain Capital. Ed Conard who was at Bain Capital, eyewitness to this momentous doings.

So, he was legally CEO -- just two more things and then I want to move to kind of like a bigger discussion about offshoring and outsourcing.

CONARD: Yes.

HAYES: Presumably, if he was hard to reach, as you just said before, because people were trying to reach him. People were trying to reach him. There was some business doings he was doing with the firm.

CONARD: He was negotiating with the firm, yes.

HAYES: But only negotiating, no management business he was doing?

CONARD: I never saw him. And I was in management meetings making investment decisions and he was never there.

HAYES: Do you think Bain should release documents establishing this? I mean, I feel like I learned more from you about this. I`m being totally honest, the salary negotiation actually makes the thing make more sense.

CONARD: I don`t know what documents they would have to release. I`m sure they looked that documents. They said the offering memorandum when they went out to raise fund would be one of the key ones. We`re just saying, oh, Mitt`s coming back, don`t worry about it, he will come back and manage the money. That wasn`t said.

SOTO: I also think this is going to die down. It is July, the dog days of summer, and we`re all looking for something to analyze.

HAYES: I don`t know about that.

SOTO: But I think it is a technicality. He wasn`t there in the day-to-day, but he was there on paper. He should have taken his name off.

MUHAMMAD: But I think it does speak to this idea out there that Mitt Romney somehow unrelatable to the average person. And the idea that you can be president, CEO, to the average person, get compensation and then say I have no responsibility for what the company has done --

(CROSSTALK)

HAYES: Let me also say this, reputationally, we were talking in the first block about reputation. I mean, you know, he was the CEO.

If Bain was -- I guess my point is this -- if Bain did something, decided to do something even if he`s in the midst of working these crazy days in Utah and turning the Olympics around and Bain decided to do something that was reputationably massively damaging or incredibly foolish or unwise on a financial perspective, one presumes Mitt Romney could have come back and said, hey, guys, don`t do this, right?

Like you guys decided like actually, you know, we decided that the future is the hula hoop and we`re going all in on a big hula hoop investment, 100 percent of our money and Mitt Romney got word of this, presumably he could fly back to Boston and be like, no, that`s a bad idea.

CONARD: You have to presume he was aware of it.

HAYES: He`s aware of his money.

MINKOVSKI: I would hope so, right. But, can I ask one more question, too. You said that you think that all of this will die down because we`re in the middle of summer right now? Will it, though?

I mean, if the question is here over a candidate`s credibility and their honesty with the public, right now people are trying to evaluate whether they believe in Mitt Romney, whether he might offer the right policies, move the country forward, as everyone likes to say.

But, you know, we`re so cynical and we have gotten used to politicians lying maybe once they`re in office and now we caught him in a lie --

CONARD: We haven`t caught him in a lie.

MINKOVSKI: Come up with a message and a way to explain it, then it`s dishonest.

CONARD: All the paperwork forward than there is.

(CROSSTALK)

SOTO: I think my name was on it and I probably should have been --

CONARD: Right. You might not like that.

SOTO: Now the media reports have come out.

(CROSSTALK)

HAYES: Can I ask this, the reason that --

CONARD: This is all really diversion, by the way.

MINKOVSKI: A diversion from whether or not people actually want to trust this candidate.

CONARD: Diversion about whether or not you want 8 percent unemployment --

HAYES: No, it`s not quite that micro and I don`t think that`s quite that macro. There`s something in between, OK? Which is the whole reason this whole thing started.

Here`s Mitt Romney -- Obama campaign hit him on a deal that Bain did, OK? It was the GST Steel factory in Kansas City, Missouri, they shut down the plant and the jobs moved offshore.

CONARD: They were not moved offshore. No.

HAYES: They were not moved offshore?

CONARD: No, the whole steel industry moved offshore but we lost our investment. We didn`t open up a plan offshore.

HAYES: The steel company is shut down and the Obama campaign runs an ad about this and Mitt Romney`s response. Here is him responding to the closing of the steel factor.

(BEGIN AUDIO CLIP)

ROMNEY: They said, oh, gosh, Governor Romney at Bain Capital closed down a steel factory. But their problem, of course, is that the steel factory closed down two years after I left Bain Capital. I was no longer there. So, that`s hardly something which is on my watch.

(END AUDIO CLIP)

HAYES: Here`s what I think is so strange about this. The Romney campaign is essentially saying there is this big distinction, the behavior of Bain pre-1999 and post-1999 that, if I were there, the implication is, we would never close down a steel factory and it just seems insane to me that that`s s the case. Obviously, you guys are basically doing the same thing in 1998 and 1999 and 2000 and 2001. Isn`t that true?

CONARD: Well, I believe that`s true, yes. I believe that Bain Capital does what Bain Capital does --

HAYES: Thank you.

CONARD: -- which is make the company stronger and grow them faster.

HAYES: And if the deal doesn`t work out and the plant closes down whether that happens in `96, `98, 2004 or 2005, right? I mean, this is the way the business works.

CONARD: I believe these attacks on Mitt and Bain Capital are really attacks on business generally. Of course, they are. OK? They`re trying to pit employees against employers, of course they are.

And what they want to do in that argument is pretend that the customer doesn`t matter. So, the company decides which company to buy from, they decide which factory they`re going to buy from, they decide how much they`re willing to pay for products.

And we as investors and employees have to respond to those demands.

HAYES: But doesn`t it drive you crazy that he just won`t defend what Bain was doing in 1999 to 2002? I just don`t understand, what is he ashamed of? This is what Bain did.

We`re going to look at Bain`s record. We know what private equity does and there`s a huge debate partly because of this campaign and partly because of your book and partly because of the conversation we`re having, about whether private equity is good for capitalism, bad for capitalism, destructive or not.

And so, the question is -- why be ashamed? Why be defensive? Why be defensive about a single plant that closed and happen to happen two years after you were running a day-to-day, and as supposed to saying, look, this is how it works?

CONARD: You say ashamed and I see great pride.

HAYES: Right, but he doesn`t see great pride.

SOTO: The president will bash Romney over the head about Bain, yet he will turn around and say, we need to extend our economy, we need to globalize, we need to recognize that there are emerging markets. So, why doesn`t Romney own it?

HAYES: Right.

SOTO: I he owns it, he is in line with what the president --

HAYES: I want Romney to read from your book is what I want him to do because you own it.

(CROSSTALK)

CONARD: I believe the following is this. When the debate really starts in August, September and October, we`ll see. I think he`ll own it. OK? When you`re here in the dog days of summer, with a lot of distraction by the Obama administration who, by the way, can spend all their primary money when Mitt spent his primary money in the primary, so Mitt doesn`t have the money to respond in the ads that really matter, OK? He can try to make his case in July when nobody is listening to it or he can wait, hold his fire and make his case in September, October, November, I believe he has to make his case.

HAYES: I want to talk about the case for actually for offshoring, right? For moving jobs out of high-wage market like the U.S. into low-wage markets right after we take this break.

(COMMERCIAL BREAK)

HAYES: All right. So, the center of this, right, is this about a debate about some long-term trends in American capitalism. A lot of it has to do with manufacturing jobs which have been sharp decline in the U.S. and a lot of the manufacturing has moved to places specifically in most famously China, where it`s much cheaper to pay people. And, the idea, I mean, the subtext in all of this right when Mitt Romney is being attacked by the Obama campaign for investing in this practice at Bain Capital or for overseeing this practice at Bain Capital, is that this thing is a bad thing, right? That`s why it`s an attack.

But it just seems to me that it cannot possibly be the case that Mitt Romney thinks it`s a bad thing because most people who work in private equity, most people at the commanding heights of American finance capitalism don`t see it as a bad thing. In fact, they see it as a positive. You write in your book, I think the very stirring defense of offshore labor.

You say, well, "Let`s not kid ourselves about just how cheap offshore labor really is. We not only pay substantially less per hour, we also avoid the cost we would incur if these workers immigrated here. We don`t pay for their medical experiences when they show up in the emergency room without insurance. We don`t pay for their pension cost if they don`t save for retirement. We don`t pay for their unemployment benefits and worker compensation, their slip and fall torts, their wear and tear on our public infrastructure and the cost of their drunk driving, drug use and other crimes.

We outsource pollution, its adverse effects on our health and it`s clean-costs. Neither the employees nor employers are here to vote and seek political handouts."

This sounds like you think, yes, this is beneficial for people.

CONARD: I think the problem with defending it, for Mitt -- and I`m not speaking for Mitt.

HAYES: You`re speaking for yourself. Just to be clear, you`re not.

CONARD: Is that people look very focus on the micro, get their nose very close to the paper and say, aha, there`s a job that was lost and there`s job that went overseas, we can talk specifically about Bain.

But on the macro level, what do we see, 20 million immigrants came into our country. There`s net in-sourcing, there`s not net outsourcing, OK? We were growing the economy fast enough that we were pulling the employees into the country, more than we were sending them out of the country.

HAYES: The jobs are different, though, we should be clear. The jobs that are going out are different than the jobs of the folks coming in.

CONARD: I don`t -- 50 percent of the 40 million jobs that were created, 50 percent of them were created at the highest end of the wage scale. Not the lowest end of the wage scale. Only 25 percent of the jobs in the 1980s were at the highest end of the wage scale.

So, there was a disproportionate increase at the high end of the wage scale over that, over that period.

HAYES: That I believe. OK.

But the point is that, there is a case that this is, that it`s rational and, indeed, beneficial to move these kind of jobs out of this country.

CONARD: Just a few more things, 85 percent of -- prior to 2000, 85 percent of the manufacturing jobs lost were lost at domestic productivity gains. After 2002, two-thirds of them were lost to domestic productivity gains. So, there`s a lot of offshoring that might have occurred.

Now, I was the head of the manufacturing practice at Bain. There were lousy investments if you take stuff over to China, right? That`s all the profit margin is gone, the value added is gone. It`s a lousy commodity product and you`re making it in high volume. That`s not where successful U.S. business is going in the future.

HAYES: Where are they going?

CONARD: They`re going to much more complicated -- well, they`re going to local services for starters and much more complicated intellectual property like Google and the Facebooks of the world.

So, at the top end would be driven by intellectual property. That has spawned growth -- double the growth in the U.S. relative to Europe and Japan in the rest of our economy, which has moved into the local service economy -- doctors, nurses, teachers, waitresses, truck drivers whose wages have been more insulated, if you will, from foreign compensation.

HAYES: But the politics of this, right, is that you should not be closing down jobs and shipping them overseas. And what`s bizarre about this debate is that people are -- both sides and, I mean, Democratic politicians and Democratic policy has overseen a lot of outsourcing and offshoring. I mean, NAFTA, obviously, did a lot of that. And a lot of textile industry and car manufacturers and things like that, moved across the border to Mexico.

There`s this debate that`s being had about the issue which, I don`t even think, I`m not even sure the Democratic Party thinks it`s a bad thing. Or at least --

MINKOVSKI: They don`t, though, if you look at what the president is doing right now. He`s by no means a champion for the American worker.

And, if you look at, for example, this Trans-Pacific Partnership Agreements being negotiated with eight or nine different countries behind closed doors. At the end of the day, this could be the largest trade deal in U.S. history.

And you have some labor unions, AFL-CIO, that`s come out and taken a stance against it, saying that it`s actually going to hurt American labor. But for the most part, we give back to this issue of I think that the labor unions are obviously going to vote for the president anyway. So, they`re not making as big of a fuss as they should where he supported in the exact same policies as Republicans do.

SOTO: It is this love/hate relationship we have here in America and it also peddles with immigration. We don`t want immigrants, but we don`t want offshoring, but we don`t want pay $10 for a head of lettuce. We don`t want to pay $50 for a t-shirt at the Gap.

So, you know, we see these arguments and there`s this big argument about the uniforms for the Olympics being made in China.

HAYES: Yes.

SOTO: I mean, there`s this outrage of it. But when you go to the store and you want to buy just some sweatpants and a t-shirt, you don`t want to pay the $50. You want to buy the ones that were made at China.

So, at the micro-level, you know, we`re fine at that. But at the theological level, the theory level, that`s where we get the pushback.

MUHAMMAD: But I think there`s also push back because I do think the middle class, the working class, do feel they have been stretched and not that the 1 percent are benefiting greatly and that they are suffering. And so, I mean, you were talking about the micro versus macro, there is a larger picture of how the middle class and working class are feeling that they are not being able to keep up and move forward with other --

(CROSSTALK)

UNIDENTIFIED FEMALE: The numbers are there.

HAYES: Middle class stagnation and wage stagnation and frustration about the economic circumstances is what`s underlying all of this. We`ll talk about that after this break.

(COMMERCIAL BREAK)

HAYES: Stagnating wages for the middle class and a sense of I think more powerful than even the economics is the emotional sense for sure in the horizons that I think is kind of the dominant mood in the wake of the great recession and the crash at a time of 8 percent unemployment and that seems to me like that`s going to be what define this election, more than anything.

And I think part of it, also, though, is the sensation that the game is fixed, the rules aren`t square. That it`s not on the level and people feel like, you know, on the tax return issue, for instance, it`s like, what the world that Mitt Romney is operating in is a very different world than I`m operating in.

There`s -- you know, I look at my tax returns and, you know, there`s not all this complexity and Cayman Islands and offshore accounts and whatever. What is that world? And it seems to me part of what has happened in the campaign is that Mitt Romney has become a kind of stand in for a lot of frustration with American inequality.

Do you think that`s sort of what happened?

CONARD: I think the Obama administration has been able to define it that way.

I think a lot comes with frustration with growth. We want more jobs. We want faster growth. We want and higher wages.

And the question is, what policies will create that?

HAYES: Right.

CONARD: Are those government-driven policies or private enterprise-driven policies? I think we have a choice in this election on that.

HAYES: Do you really think, though? I mean, always saying this yesterday, I think that always ends up being the choice. But if you look at the last time, it`s not long ago, Republicans ran everything, yet a Republican president and a Republican Congress, the percentage of GDP grew. There was no shrinking of government.

CONARD: Grew a lot more afterwards, but, yes.

HAYES: But it grew during that period. They didn`t do any shrinking. It`s just unclear to me that, actually -- the stakes always get defined in these ideological ways.

In your book, obviously, you`re not a politician. You wrote a book about a certain ideology and a certain set of principles. And Mitt Romney was on the trail, wants to say, this is a choice between this ideology and principles.

But it actually strikes me that when you dig underneath, there`s no actual evidence to suggest that there`s going to be some huge difference in the percentage of government and GDP under Democrats and Republicans. It`s --

MINKOVSKI: It`s not that cut and dry.

HAYES: -- who it`s going to be -- who`s it going to benefit?

SOTO: Interestingly enough, this rise in debt is going to be tacked on to the tax argument. So, you know, the president wanting to let the bush tax cuts expire, except for those making under $250,000. If I had a crystal ball, I would say that the Republicans are just going to say, nope, it`s about the debt relief.

And, so, you get Americans thinking, not so much about the taxes, but about the debt. Look at the spend thrift government. All they do is spend, spend, spend. And that gets people very angry and you take that emphasis off of the tax, off of the individual level and you put it on the debt and that`s where it comes back and the Republicans have a much stronger argument.

HAYES: That`s the one they`re making.

MINKOVSKI: The Republican support, they support government spending just as much as Democrats do, but they like to hide it by national security. And, I mean, when it comes to defense, this is where, the Republicans are the number one proponents of massive government spending.

HAYES: I just think there`s that much evidence that there`s that big of difference in terms of balance --

HAYES: In the wake of the recession, it rose everywhere else across the world, if we want to across the world comparisons.

I want to thank Ed Conard, former partner at Bain Capital, author of "Unintended Consequences: Why Everything You`ve Been Told About the Economy is Wrong" for joining us this morning. I love to have you back because we didn`t even get to marginal tax rates, which I love to talk about.

CONARD: Chris, thank you for having me.

HAYES: All right. What we should -- what you should know this week, right after this.

(COMMERCIAL BREAK)

HAYES: Just in moment, what we should know for the week ahead. First, a quick personal update.

My book "Twilight of the Elites" is on sale now at online retailers and your local bookstore. This Wednesday at July 18th, I`ll be appearing at the Common Good here in New York to discuss it. Check out "The Twilight of the Elites" Facebook page or our Web site at Up.MSNBC.com for more details and information other upcoming appearances.

So, what do you need to know for the week coming up?

You should know just how common places corner cutting and ethical bridges are on Wall Street. According to a survey of 500 financial workers in the United States and Britain by law firm Labaton Sucharow, a quarter of Wall Street workers said they believed unethical or illegal behavior could help people in the industry to be successful. You should know that 26 percent said they observe first hand, knowledge of wrongdoing in the workplace.

My personal favorite statistic from the survey, 30 percent said their compensation structure created pressure to compromise their standards or violate the law, while 16 percent of respondents said they would commit insider trading if they believed they could get away with it.

You should know it turns out it`s hard to design a system with massive monetary rewards for performance that isn`t also a system with massive monetary rewards for cheating.

And speaking of ethical breaches, you should know that a separate but related study from the Transparency International Corruption index shows the United States has slipped in the ranking of least corrupt countries from 16th place in 2001 to 24th place in 2011.

We should know the World Bank also reports the U.S. is falling behind most other developed nations to a weakening of corruption control since the 1990. We should the U.S. Department of Agriculture has named 1,000 counties in 26 states, natural disaster areas due to a savage drought that has been destroying crops for farmers around the country.

You should know this is the largest such designation in the program`s history. While Congress will most certainly pass a farm bill this year, it is doing nothing to reduce carbon and mitigate the effects of climate change. You should know that all the price supports, crop insurance and the rest of it isn`t going to count for very much if Republicans who represent farm areas get the future they seem to want.

And finally, we should know that while the party that ruled Mexico for 71 years, the PRI, appears to have regained power in the latest presidential election, you should know that challenger Andres Manuel Lopez Obrador has filed a formal complaint to annul the victory of PRI`s Enrique Pena Nieto, over charges of improper campaign financing and outright vote buying.

You should know Pena Nieto has denied wrongdoing, but you should also know the PRI has a very long history of corruption and vote buying, which might explain why in a recent poll by the newspaper "Reforma," 40 percent say they didn`t think that the election was clean.

Law professor Stephen Carter back with us at the table.

And I want to know what you think people should know this week, Dedrick Muhammad?

MUHAMMAD: What I would like people to know is to look at the legacy and life of Willis Edwards. He`s a national board member who passed away this past Friday from cancer. You know, a long history of activism and I just -- you know, I think like most Americans the -- what we contribute most in life is not what we don`t get a paycheck for, but what we do day by day just because we believe we need to make our community a better place.

And his type of activism helped make the NAACP Image Awards, what it was -- what it is today. He also is co-chair of the HIV/AIDS subcommittee and really pushed the NAACP to make AIDS also a civil right, he died with that type of activism is something that all of us can reflect and learn upon.

HAYES: Wonderful. All righty.

Stephen Carter?

CARTER: What people should know this week is with all of the scandal at Penn State involving Joe Paterno, the national icon, and so on. We just saw a similar scandal with much less attention in Montana, a football team as well. It`s merely the tip of the iceberg.

Wherever you have enormous power concentrated with people surrounded by lots and lots of acolytes and followers, you`ll have the instinctive drive to protect that even at the cost of some of these people`s lives.

HAYES: I think there`s been an interesting conversation that`s been opened up about college sports in the last year or so.

CARTER: It`s not just sports. In all the areas of life where we tend to elevate people very high and where a lot of people`s living depends on, keeping them at the high elevation, that`s where we`re going to find.

HAYES: Victoria?

SOTO: I want us to think about food and security. You mentioned in your stories of the week, that fact that there`s been a drought that has ravished these crops. Over the past several weeks, we have seen a fall in these crops which means increases in grain prices.

So what does this mean? You have a decrease in crops. You have people going hungry. You have economic instability which leads to political instability.

So, down the road, thinking about that connection of food and security.

HAYES: Alyona?

MINKOVSKI: You mentioned the transparency report. I`d say that you should know that David House, from the Bradley Manning support network, he put up on cryptome.org notes that he took when he was called in to the grand jury, that is looking into trying to find a way to prosecute WikiLeaks in Alexandria, Virginia. And I know that WikiLeaks Julian Assange, they are very politically polarizing issues and figures, but overall everyone should pay attention to the way that they are trying to lead this investigation, the way that they`re trying to use the Espionage Act, that could have a lot of repercussions for more journalism and for the free press.

HAYES: Yes, I saw the posting in the testimony. It was pretty creeping --

MINKOVSKI: Cryptic?

HAYES: Well, also, yes, very cryptic.

I want to thank my guests today, Dedrick Muhammad from the NAACP, Stephen Carter from Yale University, your new book --

CARTER: "The Impeachment of Abraham Lincoln. It`s a courtroom thriller.

HAYES: Courtroom thriller and kind of serve an alternate history. I`m about 40 pages in and I`m loving so far. Check that out.

Victoria DeFrancesco Soto from Latino Decisions and Alyona Minkovski of "The Alyona Show" on Russia`s RT television network -- thank you all.

And thank you for joining us. We`ll be back next weekend, Saturday and Sunday, at 8:00 Eastern Time.

Coming up next is "MELISSA HARRIS-PERRY". On today`s MHP, Melissa has a few things to say about Mitt Romney`s remarks in the NAACP. Let`s just say the words "free stuff" are about to meet their match. She`ll have her answer on "MELISSA HARRIS-PERRY" coming up next.

We`re going to see you next here on UP.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.END

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